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OECD Lauds BRICS Role in Global Economy

OECD Lauds BRICS Role in Global Economy

The BRICS countries will continue to play a key role in the global economy although they reported slower growth in recent years, said an expert with the Paris-based Organization for Economic Cooperation and Development.
Federico Bonaglia, deputy director of OECD Development Center, told Xinhua news agency that slowdown in the growth of the BRICS (Brazil, Russia, India, China and South Africa) economies will not have a significant impact on their joint share in the world economy.
“China and India continue to maintain a very sustained growth, a situation that both Russia and Brazil are expected to reach next year,” Bonaglia said.
Latest OECD economic outlook expected a return to growth in Brazil and Russia. Meanwhile, China and India are projected to expand their GDP by more than 6%.
He said India is the only BRICS country that has not experienced a slowdown in the past few years, with a growth rate of around 8% in 2015 and 7.7% projected for 2018. Brazil and Russia are poised for economic recovery, Bonaglia said.
The Brazilian economy contracted 4% in 2015 and 3.6% in 2016. “The good news is that it is expected to return to a positive growth in 2017 and reach a growth rate between 1.5 and 1.6% in 2018,” he estimated.
Russia, which has experienced “a very complicated situation”, will be able to shake off recession in 2017 and reach a growth rate around 1.4%, he said.
However, the outlook for South Africa remains clouded, said the expert, who put the country’s growth rate for 2017-2018 at 1%.
Bonaglia told Xinhua that BRICS economies play a very important role by injecting dynamism into the world economy. “In 2000, the BRICS represented 40% of the GDP. In 2010, they represented over 50% and in 2015 they reached 54.7% of world GDP,” he recalled.
However, despite this strong progress, the BRICS face challenges in terms of productivity growth and innovation, the OECD expert noted.
The International Monetary Fund recently retained India’s growth forecast for the current fiscal and the next even as it revised up its estimates for the eurozone and China.
In an updated World Economic Outlook released on July 23, IMF forecast India’s FY18 and FY19 growth at 7.2% and 7.7% respectively, unchanged from its April estimate.